Lights out at Fingerhut
By Bill Catlin
Minnesota Public Radio
April 5, 2002

The first wave of Fingerhut layoffs is complete. In Minnesota about 2,400 of the catalog retailer's employees are out of work. Another 900 in Tennessee are hitting the street. More layoffs are in the offing. And even as negotiations continue over a possible sale of Fingerhut, optimism about the company's future appears to be fading.

Kim Tennison will keep her job as a Fingerhut inventory analyst until the end of the summer. She's waiting to see whether Federated succeeds in finding a buyer for Fingerhut.
(MPR Photo/Andrew Haeg)

In Minnetonka Friday morning, dozens of laid off Fingerhut workers headed into the corporate headquarters for a career transition meeting. Former merchandising analyst Marcy Rothstein, who spent 17 years with the catalog retailer, never worked anywhere else.

A Wayzata investor group's efforts to purchase Fingerhut have offered some hope the company -- and many of its jobs - would survive. But after last week's announcement that the first round of layoffs would occur, Rothstein says she's not holding out hope for Fingerhut.

"The mood has definitely dropped, and with today everybody getting pink slips, it's not too optimistic anymore at this point," Rothstein says.

The 2,400 Minnesota job cuts represent one of the biggest single layoffs in Minnesota. They hit a state where job loss during the recession has exceeded the national pace, and they occur amid some signs of a recovery.

Melinda Thompson career as a senior telecommunications analyst at Fingerhut spanned 13 years.
(MPR Photo/Andrew Haeg)

"Just this past week had a survey of manufacturers that indicated that our core manufacturing business believes that we're on the upturn," says Rebecca Yanisch, Minnesota's commissioner of the Department of Trade and Economic Development. "Having the Fingerhut announcement certainly slows down that sense of things getting better, because for the city of St. Cloud this is certainly tough news and a tough environment to be in."

St. Cloud has more than half of the 4,700 Fingerhut workers in Minnesota, as of last January. Many of the cuts are in St. Cloud, but the company won't say how many. Fingerhut's parent company, Federated Department Stores, continues discussions with Peter Lytle's Business Development Group in Wayzata on a possible sale of Fingerhut.

Last week Federated opened the process to suitors interested in pieces of Fingerhut.

Yanisch says the delay in reaching a deal is probably taking a toll on the company's prospects.

Fingerhut's St. Cloud facility was deserted after layoffs at the company took effect.
(MPR Photo/Tim Post)

"Every day that goes by makes it more difficult to recapture the Fingerhut customer. So it's really tough and it's disheartening to see the delay in the negotiations here. So, yes, it's hard to continue the optimism the more the time passes by," Yanisch says.

Yanisch says there is some good news. An official with the U.S. Department of Labor gave informal approval to using federal dollars to provide training and job search assistance to Fingerhut workers.

About $4 million remains from an emergency grant to assist airline workers laid off after the September terror attacks.

At Federated's Cincinnati headquarters, about 300 people protested the possible Fingerhut shutdown in a demonstration led by union workers who travelled from St. Cloud. The company responded with allegations the union has tried to discourage suitors who might buy parts of fingerhut and hire some former workers.

Jane Palmbach with the Union of Needletrades, Industrial and Textile Employees dismissed the company's statement, and says she's not losing hope about a sale to Lytle's group.

"There's no reason this can't proceed. They said it themselves; that they're making progress in talks. So I don't see anything to be downbeat about. I think this works out," according to Palmbach.

Craig Gardner has worked in data processing at Fingerhut for 6 1/2 years, and is one of the 2,400 Minnesota-based Fingerhut employees to lose their jobs.
(MPR Photo/Andrew Haeg)

In St.Cloud some laid-off union workers are less than optimistic about their prospects in the job market. Donna Harret and her friend, Sue Bell, are hitting the pavement after 15 years with the company each.

Harret says she'll probably have to settle for wages $5 or $6 an hour less than Fingerhut paid. "St. Cloud is not a good-paying city at all; it is not, it absolutely is not at all," she said.

"Now it's going to be even worse, with all these people laid off, they're going to take anything at any wage right now," Bell added.

If no sale goes ahead, Federated plans to continue cutting jobs. The company sent out another roughly 600 layoff warning notices this week.